Merlin Competes With Hispania To Become Largest Hotel Socimi

26 July 2016 – Expansión

Merlin, which has incorporated several hotels into its portfolio following its purchase of Testa, now owns 24 properties worth €654 million. Merlin is the largest real estate company and Socimi in Spain.

The merger between Merlin and Metrovacesa will create the largest real estate company and Socimi in Spain, market leader in the office segment and with a leading position in the shopping centre sector. In addition, the new Merlin will be one of the largest hotel lease operators in Spain, which will allow it to catch up with Hispania, the Socimi in which the investor George Soros holds a stake.

Following the integration with Metrovacesa, Merlin will go from owning 12 hotels worth €398 million to having 24 hotels with a gross asset value (GAV) of €654 million. In this way, the new Merlin will increase the value of its assets by 1.6 times following the integration, which is expected to be closed during Q4 2016, after the competition authorities and the general shareholders’ meetings of both companies have approved the deal.

By number of rooms, the union of Merlin and Metrovacesa will give rise to a hotel lease giant, with almost 4,500 rooms and a gross yield of 5.8%. The operation will also allow the group to increase the appeal and liquidity of its hotel division. The hotel business will account for around 7% of the new Merlin, which will have an total asset portfolio worth €9,300 million.

The company’s integrated portfolio of assets will include hotels as iconic as the Eurostars de las Cuatro Torres, inherited from Testa and the Barceló Torre, inherited from Metrovacesa, both located in Madrid.

Ranking

For the time being, Hispania leads Spain’s ranking of the owners of hotels operated and managed by third parties, both in terms of the number of rooms and asset value. At the end of the first quarter, Hispania’s hotel portfolio included 8,234 hotel rooms in total, across 27 hotels, as well as two shopping centres and a plot of land, with a gross value of €862 million. In addition, in March, Hispania acquired the mortgage debt of Dunas Hotels & Resorts from several financial institutions, whereby acquiring 1,183 rooms in four hotels. The group, which owns the Hotel Guadalmina Spa & Golf (Marbella) and the Holiday Inn Bernabéu (Madrid) also bought the Hotel Oasis Resort (Lanzarote) last week. Following that operation, Hispania now owns 35 hotels and more than 10,400 rooms. Merlin’s hotel lease contracts all involve fixed rents, whereas Hispania operates using all types of lease contracts. Some include variable components linked to the evolution of the business. Currently, that is the most common type of lease contract in the hotel sector.

Exit

Nevertheless, Merlin has described its hotel division as “non strategic”, “which means that, in the medium term, it will be looking for a way out of this arm of its business”.

Sources in the sector believe that, if it chooses to exit the hotel business in a single transaction, then we will see a record-breaking operation in the hotel market. (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Hispania Buys Hotel Oasis Resort In Lanzarote For €28M

22 July 2016 – Expansión

The Socimi Hispania, through its subsidiary Bay Hotels & Leisure, has acquired 100% of the company Inversiones Inmobiliarias Oasis Resort, owner of the Hotel Oasis Resort located in Costa Teguise (Lanzarote), from CaixaBank and Metrópolis for €28 million.

After this operation, the Barceló Group will operate the hotel under a lease contract, which forms part of the framework agreement that governs all of the hotels operated by the group.

The 4-star property has 372 rooms and is located right on the beachfront, opposite Hotel Barceló Lanzarote.

As part of its investment strategy, the group is considering integrating this asset with Hotel Barceló Lanzarote, with the aim of creating a mega resort with almost 800 rooms on the beachfront.

Although the hotel was refurbished recently, an investment of €4 million is planned to bring it up to Barceló’s standards.

Following this acquisition, Hispania now owns 35 hotels, primarily in the vacation segment, and so has more than 10,400 rooms, making it the largest (non-operator) hotel owner in Spain.

According to Hispania’s CEO, Concha Osácar, the Canary Islands is a key market for the company, given its stable occupancy rates throughout the year and its high degree of exposure to European tourists.

On 18 July, Hispania acquired 100% of the shares in the company Later Deruser, owner of the Hotel Paradise Portinatx in Ibiza (Balearic Islands) for €11 million, which will also be operated by Barceló.

Original story: Expansión

Translation: Carmel Drake